Turning Unmarketable Spuds Into Premium Spirits

We’ve all heard the saying: “when life gives you lemons, make lemonade.” What if life gives you reject potatoes? For Ken Beattie, the answer was obvious — make vodka.

Beattie Farms is a fifth generation family farm in Alliston, ON, founded in the late 1880s by Roland Beattie, a Scottish immigrant looking to put down roots in the new world. Today, his great grandson, Ken, runs the farm with his wife, Liz, and youngest son, Barry.

Potatoes have always had a place on Beattie Farms, and it was Ken’s father who developed and grew the business of supplying chip processors. Today, the family produces 2,000 acres a year of potatoes for processing and manages crop rotations by renting and trading field space with other local growers.

It’s a great business, but it has its downside. “Processors are very particular as to size, mechanical damage, colour, things like that,” says Liz Beattie, explaining that an entire load of potatoes can be rejected and returned to the farm if the processor determines a fairly low threshold for defects has been exceeded.

“So we sort here,” she says. Indeed, potatoes are sorted as they go into storage, and again when they come out to be loaded onto trucks bound for the processing plant. “For every 80,000 pound trailer load, we’re grading out about 5,000 pounds — that’s soil and vines as well as potatoes.”

Even so, that left the Beatties with a lot of unmarketable spuds. “We were taking them to cattle farmers for feed and we weren’t getting paid for that,” says Liz. “Then one day Kenny came home and said, ‘We should make potato vodka.’ It made sense, I mean we already had the potatoes.”

But Ken and Liz knew nothing about making vodka, so they took a trip to PEI to visit a local distillery to see what such a venture might look like on their farm. After that, says Liz, it was about getting the right people together to start turning Ken’s idea into reality.

BUILDING A BUSINESS AND A BRAND

As it happened, around about the time Ken and Liz were looking for an expert to hire, Andy Murison was looking to get out of the big distiller rat race and into the craft side of the business.

With two decades under his belt with the likes Smirnoff and Johnny Walker, Murison, along with a business partner, were looking for something a bit more meaningful. “We were trying to get into the craft distilling business,” he says, adding that he knew it was something they could not just do without a farm partner.

“Craft is about authenticity,” says Murison, who is now sales and marketing manager for Beattie’s Distillers. “If we did it on our own, there’d be no authenticity. Ken and Liz had the land, the farm, the history.”

Murison and the Beatties found each other through a mutual connection and started talking in the spring of 2014. There was, says Andy, a bit of a lull as Ken and Liz contemplated the task ahead and the kind of investment it would require. By the following spring, everyone was on board.

“It’s a very large investment,” says Beattie. “This is a $3.5 million project, but we built it so that we wouldn’t have to expand. We’ve got a 42-plate still and an 8,000 square foot facility.” She adds that it takes 17 pounds of potatoes to make each 750 mL bottle of Beattie’s vodka.

They were entering an enormously crowded and competitive adult drink sector, one Murison knew well. So the plan was to build the brand and the distillery at the same time.

“It really was a team effort,” says Murison. Permits were required from the City of Alliston, the Liquor Control Board of Ontario (LCBO) was approached to get a listing, equipment was sourced from Europe, a professional distiller needed to be hired, the distillery needed to be built, bottle and label to be designed — you name it, it all happened in a very short period of time.

“We got our first order from the LCBO in February 2016,” says Murison. “And we were on store shelves by April 28 of that same year.”

As with most new ventures, there were setbacks. In July 2016, the company had to issue a recall because of a manufacturing error. The alcohol, by volume, did not match the label and both Murison and Beattie say it was a valuable learning experience to have early on.

Today, Beattie’s Distillers potato vodka is carried in over 350 stores across Ontario, where it is also the number one, super premium (the category for spirits priced $35 or higher) Ontario-made vodka.

And they recently launched two new products — a sweet potato vodka and a poitín (pronounced potcheen). “It’s Irish for ‘small pot’, a traditional way of distilling that goes back to the potato famine,” says Beattie. “I believe this is the first poitín made in Canada.”

MARKETING THE STORY

Expanding the product line is one thing. Murison is committed to expanding the retail footprint, too. He’s already struck a deal to sell Beattie’s potato vodka into Manitoba, while Alberta and New Brunswick are poised to be on board in early 2018.

And if you ask him, Murison will tell you he’s selling the story as much he is the vodka itself, because, let’s face it, the world doesn’t really need another vodka, but everyone likes a story, and this is the entire ethos behind craft production.

“The discipline of working in this industry for 20 years is in understanding the brand and the DNA of that brand,” he says. “Everything about this product tells our story. The green on our label represents the farm and our roots in agriculture. The bottle is broad at the shoulders to reflect the farmer and his strength. Everything we do is done strategically to reflect the farm and that this is a farm-to-bottle story.”

He feels good about the future of craft distilling in general. “Craft beer has helped show customers that they have choices, and customers like the local stories, the authenticity. It’s the same in craft distilling. It becomes a marketing play where a rising tide lifts all boats.”

When it comes to liquor sales, there are always policy challenges. Every province has its own tax structure and sales channels for alcohol. Ontario, Manitoba and New Brunswick operate government monopolies while Alberta operates under a system of privatized liquor sales. Manitoba has an exclusive markup rate for batch distillers while, about a year ago, Ontario’s government slapped a huge sales tax on “on-farm” bottle sales.

It’s Murison’s job to negotiate it all. “A monopolistic market is positioned for wide distribution,” he says. The downside is that if one provincial buyer says no, then it’s no everywhere. “Alberta is what I think of as a more traditional sales environment — you have to go and negotiate your margins with every outlet. But if one says no, there are plenty of others you can approach.”

As of December 2017, Beattie’s Distillers have sold half a million bottles of potato vodka made right on the farm from potatoes the chip processors don’t want. It’s a milestone figure, but there is still a long way to go. Distiller Harrison Torr is the only employee drawing a full-time salary. Andy takes a nominal wage, Ken and Liz aren’t being paid, neither is their niece, Sarah, who is working as an assistant to the distiller to learn the trade.

But everyone is pumped about the future of Beattie’s Distillers and what it means to the future of Beattie Farms. “We cried the day the still went up,” says Liz. “We believe in this. Everyone involved believes in it, and one day, we’re going to be able to sit back and say we built this.” FF